No cash? No problem.

Mobile payment systems gaining traction

After cutting Deb Peterson's hair, Jessie Carter, salon owner of The Porch, takes Peterson's payment through a mobile payment application on her iPad.

By SARAH BROWN
CNA staff reporter
sbrown@crestonnews.com

It’s the ultimate convenience.

Mobile payment systems, such as Go Payment by Intuit, Square Register and PayPal Here allow allowing local business owners to accept credit and debit card payments in remote locations using a smart phone or tablet.

How it works

For the purchase of goods or services, a merchant will swipe the customer’s debit or credit card through a small card reader, which is attached to the device’s audio jack. The customer’s billing information and encrypted card number is then appears on the screen before the customer approves the transaction by signing the screen with their fingertip.

Most providers issue a complimentary card reader for signing up for service. However, to utilize the card reader, the merchant must have a data plan or access to a wireless internet connection and the provider’s free payment application downloaded on their device of choice.

While security is always a concern, mobile payment solutions are considered safe and secure.

“The biggest misconception is credit card information being stored on the phone, which it is not,” said Matt Brummett, who processes payment for his mother Lauri Long of Creston, who sells homebaked goods at farmers’ markets in Creston, Winterset and Corning.

Brummett, who studied computer applications and network security at Colorado Technical University, said he wouldn’t be using any mobile form of payment if he did not trust it.

Mobile payment systems such as Square Register, Paypal Here and Go Payment are just as safe as credit card terminals. Not only is card information never stored on a smart phone, the service providers adhere to strict banking industry protection standards.

“It’s perfect for a small business,” said hair stylist and business owner Jessie Carter, who operates The Porch hair salon from her home in Creston.

Carter, who accepts debit and credit card purchases on her iPad, pointed out the ease of the user-friendly interface and said she does not get charged a monthly fee for service.

“It’s great, because if I don’t use it, I am not charged,” she said.

Carter said when she first started researching credit card payment solutions, “everything was so expensive.”

Traditional credit card terminals, which are attached to a cash register or point-of-sale system, charge a monthly fee of more than $80 regardless of use.

Square mobile payment system boasts no monthly fees, listing fees or set up fees and only charge 2.75 percent per transaction. Go Payment by Intuit offers the same option as Square, but also allows high volume businesses to pay a monthly fee of $12.95 and reduces the transaction fee to 1.75 percent.

Carter and Brummett said they love the portability.

“When I am doing hair for a wedding, I can take payment whereever I am,” said Carter.

Brummett echoed Carter’s claim.

“It means never having to miss out on a sale,” said Brummett. “People are always asking, ‘do you take cards?’”

Rena Cheers, owner of Arispe Feed and Grain said she uses an iPad to process payments for the restaurant.

“People really like the ability to get a receipt emailed to them or sent to their phone.”

Drawbacks

While Cheers praised the ability to send electronic receipts, her mobile payment system does not produce paper receipts.

“If someone wants a paper receipt, we give them a copy of the ticket,” said Cheers.

While selling goods on the course of RAGBRAI in West Des Moines, Brummett said sales increased drastically by 30 to 50 percent. However, he points out the mobile payment system is only as good as the data network available.

“During RAGBRAI, there were so, so many people on the network, the processing took longer,” said Brummett.

As far as using mobile payment systems in rural areas, Brummett said “they are only as good as your signal.”

The future

A 2012 study released by consulting firm KPMG, the United States audit, tax and advisory service firm, mobile payments will top $1 trillion by 2015 and the volume of mobile payments will increase by 100 percent per year until then.

According to Square’s website, 180 million people carry credit cards and 66 percent of instore transactions are made with credit, debit and prepaid cards.